Martinrea International Inc. · TSX:MRE
Martinrea International — Q3 2015 Earnings Presentation
35 slides from Martinrea International's earnings presentation, 2015
Slide 1: Investors Presentation – Q3 2015
INVESTORS PRESENTATION – Q3 2015
Slide 2: Legal Disclaimer
LEGAL DISCLAMER This presentation contains forward-looking statements within the meaning of applicable securities laws (“forward-looking statements”), including, but not limited to, statements relating to future expectations of our revenues, operating margins, SG&A, earnings and adjusted net earning
Slide 3: Company Overview
COMPANY OVERVIEW • Martinrea is a leading Tier One supplier of automotive parts, assemblies and modules – Revenues have grown from $1.1 billion in 2009 to $3.6 billion in 2014 representing a CAGR of 26%; LTD Revenue ~ $3.8 billion – Large book of new business awards • The second largest North Americ
Slide 4: Martinrea's Evolution
MARTINREA’S EVOLUTION Acquires plant from Acquires majority Royal Laser Oxford Automotive changes name to: Acquires of Honsel NOV 2001 DEC 2005 ThyssenKrupp Budd Fabco JULY 2011 Martinrea International Inc. JUN 2002 North America DEC 2006 Acquires Acquires Pilot Industries SKD Automotive Acquires DE
Slide 5: Our Vision
OUR VISION Our vision for the future is to be the best, preferred and most valued automotive parts supplier in the world in the products and services we provide our customers. 5
Slide 6: Our Mission
OUR MISSION Our Mission is to deliver: ‐ Outstanding quality products and services to our customers ‐ Meaningful opportunity, job satisfaction and job security to our people through competitiveness and prudent growth ‐ Superior long term investment returns to our stakeholders ‐ Positive contribution
Slide 7: Top 10 Principles
TOP 10 PRINCIPLES PRINCIPLES: Our success will be based on the execution of our guiding principles, applied with integrity, in all that we do: 1. We make great, high quality products 2. Every plant/division must be a centre of excellence 3. Be disciplined. Discipline is key 4. We attract, train and
Slide 8: Martinrea's Global Presence
MARTINREA’S GLOBAL PRESCENCE SLOVAKIA 1 Division CANADA 13 Divisions GERMANY 3 Divisions US CHINA 13 Divisions 2 Divisions MEXICO 9 Divisions SPAIN 2 Divisions BRAZIL 1 Division 8
Slide 9: Business Overview
BUSINESS OVERVIEW A leading Tier 1 supplier of metal parts, assemblies and modules, and fluid management systems. Steel Metal Forming and Assemblies Fluid Handling Systems Aluminum Die Casting (Martinrea Honsel) Capabilities include: Designs & engineers complete systems in: Aluminum casting and mach
Slide 10: Competitive Landscape
COMPETITIVE LANDSCAPE Steel Metal Forming (North America) Fluid Handling (North America, China, Slovakia) Aluminum Components (Worldwide) Second largest Top three supplier Leading North American in North America supplier of light metal former by Leader in growth metal revenue since 2005 comp
Slide 11: North American Platform Portfolio
NORTH AMERICAN PLATFORM PORTFOLIO Current Top 10 Platforms in North America 1 Ford Escape/Focus 2 GM Equinox / Terrain 3 Ford Fusion/Edge 4 GM Pickups, SUVs 5 Chrysler 300/Challenger/Charger 6 Ford F Series Super Duty 7 GM Malibu/Impala 8 Chrysler Cherokee/Commander 9 Chrysler 200 10 Chrysler Wrangl
Slide 12: Acquisition of 45% Interest in Martinrea Honsel
ACQUISITION OF 45% INTEREST IN MARTINREA HONSEL • On August 6, 2014, Martinrea acquired the 45% equity interest in the Martinrea Honsel Group held by Anchorage Capital LLC for total proceeds of €160 million representing an EV/LTM EBITDA multiple of approximately 5.8x • Strategic reasons for acquirin
Slide 13: Market Trends – Aluminum (Europe)
MARKET TRENDS – ALUMINUM (EUROPE) A previous short term trend analysis predicted 144 kilograms of aluminum content by 2015. The current trend analysis and market evidence supports a forecast of 150 kg per vehicle in 2015, and the theoretical CO2 based analysis supports 180 kg by 2020 Source: EAA Alu
Slide 14: Market Trends – Aluminum (North America)
MARKET TRENDS – ALUMINUM (NORTH AMERICA) Source: North American Light Vehicle Aluminum Content Study June 2014; Ducker Analysis 14
Slide 15: Martinrea Honsel Product Focus: Engine Blocks
MARTINREA HONSEL PRODUCT FOCUS Engine Blocks 15
Slide 16: Martinrea Honsel Product Focus: Structural Components
MARTINREA HONSEL PRODUCT FOCUS Structural Components 16
Slide 17: Highlight of Recent New Business Awards
HIGHLIGHT OF RECENT NEW BUSINESS AWARDS Annualized Revenue Customer Products SOP at Peak Volumes Aluminum knuckles and control arms $200,000,000 2015‐2018 Aluminum components – oil pan / carrier $10,000,000 2016 Equinox, Terrain – steel metal forming $175,000,000 2017 Pick‐up trucks – steel metal fo
Slide 18: Macroeconomic Outlook – Automotive
MACROECONOMIC OUTLOOK – AUTOMOTIVE Consumer confidence remains steady; North America looks good; Europe appears to be recovering; Asia is a large market Positive factors in North America • New auto affordability at or near record lows (app. 23 weeks) • Consumer debt levels in U.S. are improving • U.
Slide 19: Tomorrow's Opportunities: US Car and Light Truck Sales
TOMORROW’S OPPORTUNITIES US Car and Light Truck Sales 18,000,000 We are here 17,000,000 16,000,000 15,000,000 Annual Sales 14,000,000 13,000,000 12,000,000 11,000,000 Recession 10,000,000 9,000,000 Year • The future looks good and volumes should be strong for the next few years • Industry has gone t
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS • Revenue has recovered from trough in 2009 • Revenue has grown from ~$1.1 bn in 2009 to ~$3.6 bn in 2014 Top‐line Growth • LTM Revenue ~$3.8 bn • Operating margins are expected to continue to increase due to Improving Operating increased capacity utilization, stable launch acti
Slide 21: Revenue
REVENUE 4,000 3,500 3,000 In Millions Of Dollars 2,500 2,000 $3,775 $3,599 $3,222 1,500 $2,901 $2,193 1,000 $1,689 $1,138 500 0 2009 2010 2011 2012 2013 2014 LTM Revenue growth from 2009 to 2014 was significant (CAGR 26%). Growth is expected to continue but at a more normalized pace. 21
Slide 22: Adjusted Operating Income Margin
ADJUSTED OPERATING INCOME MARGIN 8% >6% 6% Adjusted Operating Income Margin % 4.9% 4.6% 4.1% 4.1% 4% 2% 0% 2011 2012 2013 2014 2017F Operating income margins are expected to improve by 50% from 2014 to 2017 on increased capacity utilization, stable launch activity and productivity / efficiency impro
Slide 23: Adjusted Net Earnings Per Share
ADJUSTED NET EARNINGS PER SHARE Full Year Financials Quarterly Financials 13 5 1.32 $1 .40 40 $0 .45 $1 .20 0.39 $0 .40 11 5 35 0.36 0.98 In Millions Of Dollars 0.97 $0 .35 In Millions Of Dollars $1 .00 30 95 0.88 0.30 0.79 0.28 $0 .30 $0 .80 25 0.27 75 0.61 0.23 $0 .25 $0 .60 20 0.21 55 $0 .20 $113
Slide 24: Cash Flow / Capex
CASH FLOW / CAPEX Operating Cash Flow CAPEX 300 250 250 200 200 150 150 $280 $259 $237 100 $201 $204 $198 100 $180 $149 $142 $146 50 50 $91 $89 $51 $24 0 0 2009 2010 2011 2012 2013 2014 LTM 2009 2010 2011 2012 2013 2014 LTM The Company is a significant cash flow generator. Cash Martinrea has made si
Slide 25: Steel Metal Forming
STEEL METAL FORMING vw MARTINREA 4 —
Slide 26: Martinrea Heavy Stampings
MARTINREA HEAVY STAMPINGS Ford Escape – C520 26
Slide 27: Martinrea Heavy Stampings
MARTINREA HEAVY STAMPINGS Ford Escape – C520 27
Slide 28: Martinrea Hot Stampings - Detroit
MARTINREA HOT STAMPINGS ‐ DETROIT 28
Slide 29: High Pressure Aluminum Die Casting
HIGH PRESSURE ALUMINUM DIE CASTING 29
Slide 30: Low Pressure Aluminum Die Casting
LOW PRESSURE ALUMINUM DIE CASTING 30
Slide 31: Martinrea Honsel Spain – New Aluminum Facility
MARTINREA HONSEL SPAIN – NEW ALUMINUM FACILITY Automatic Assembly Line for Jaguar LandRover Knuckles/Control Arms 31
Slide 32: Martinrea Honsel Mexico - Future Expansion
MARTINREA HONSEL MEXICO ‐ FUTURE EXPANSION High Pressure Die Casting 32
Slide 33: Martinrea Honsel Mexico - New Aluminum Facility
MARTINREA HONSEL MEXICO ‐ NEW ALUMINUM FACILITY Low Pressure Die Casting 33
Slide 34: Martinrea Honsel – Machining Capabilities
MARTINREA HONSEL – MACHINING CAPABILITIES Jaguar Engine Block Machining Line 34
Slide 35: Martinrea Riverside, Missouri – New Metallics Facility
MARTINREA RIVERSIDE, MISSOURI – NEW METALLICS FACILITY 35
Martinrea International — Q3 2015 Earnings Presentation on 6ix